U.S. corn futures fell to a 2-1/2-week low on Friday in the steepest slide in nearly a month, pressured by technical selling and concerns that stockpiles are growing as elevated prices blunt demand.
Soybeans retreated from one-month peaks and posted their biggest drop in three weeks on chart-based selling and profit-taking following four days of gains. Wheat followed corn and soybeans lower.
A firm dollar, which increases costs for those holding other currencies, further weighed on grains.
"Technically, we pushed up to some tough resistance. When we were at the bottom of the recent trading range, our corn exports and our demand grew. But when we got to the top of the range, they dwindled," said Don Roose, president of U.S. Commodities. "The dollar continues to move higher and the ethanol margins are deep in the red. Weather in the feeding areas is non-threatening, so (livestock) efficiency is up," he said.
Chicago Board of Trade March corn fell 14-1/4 cents, or 1.9 percent, to $7.37-1/4 a bushel, the steepest drop since Nov. 12. Selling accelerated as the contract broke below its 50-day moving average around $7.48.
The contract was down 2.1 percent from a week ago, the biggest weekly decline in six weeks.
CBOT January soybeans dropped 19 cents, or 1.3 percent, to $14.72-1/4 a bushel. But the contract added 2.3 percent in the week, the third straight weekly gain.
January soy briefly rose above its 50-day moving average of $14.96 but failed to hold the gains due to a lack of follow-through buying.
Traders were also eyeing the contract's looming "death cross", a bearish technical indicator referring to the 50-day moving average breaking below the 200-day moving average.
Losses in the front-month soybean contract were deepened by scheduled rolling of long positions by index funds to the next contract month. The "Goldman Roll" is expected to continue for four more days.
CBOT March wheat lost a penny at $8.61 a bushel. The contract's 0.5 percent weekly decline was the first drop in three weeks.
A monthly U.S. Department of Agriculture report next week is expected to show U.S. corn stocks grew by 2.5 percent due to poor export demand, a Reuters poll showed, although stocks will remain the smallest in 17 years due to a crop-crippling drought this year.
Soybean stocks are seen tightening to the lowest level since the 2003/04 marketing year (Sept/Aug) amid a scorching export pace, especially to top buyer China, analysts said.
The USDA on Friday confirmed private sales of 115,000 tonnes of U.S. soybeans to China for 2012/13 delivery.
Improved weather in South America, where farmers are expected to harvest the biggest soy crop ever next year, added pressure in soybeans.
Rains are expected in Brazil's southern grain-producing states, forecaster Somar said on Friday, a day after the government held its forecast for a record soybean crop despite some concern over dryness.